Third Workshop on the Political Economy of Brexit

The third instalment of the SPERI White Rose research project on the ‘Political Economy of Brexit’, led by Scott Lavery, took place on Wednesday 9th November at the University of Leeds. Organised by Charlie Dannreuther, the workshop examined the impact of Brexit on Britain’s infrastructure and investment and focused on how leaving the EU might affect a number of key areas of the economy including finance, energy and agriculture.

This was the third workshop in the series and followed on from our previous two workshops held at the University of York (finance and trade) and the University of Sheffield (labour markets) respectively.

The first of the day’s three panels focused upon fiscal and industrial policy and the future role of FDI. The panel noted that while Brexit might have opened-up space for a more interventionist industrial strategy, considerable domestic and international barriers remain which could undermine this agenda. The consensus across the panel was that Brexit would likely have negative implications for inwards investment.

The second panel considered the increasing trend towards the commodification, privatisation and financialisation of Britain’s infrastructure. The panel discussed how Britain is dependent upon FDI to fund new projects and that Brexit could result in a flight of investment undermining Britain’s ability to secure its energy transition.

The day’s keynote address was given by Emeritus Professor Wyn Grant of the University of Warwick who looked at the implication of Brexit for Britain’s agricultural policy. In particular, Professor Grant focused on the EU’s Common Agricultural Policy, its disappearance and what might replace it.

The final panel of the day of the discussed the issue of street level investment post Brexit. The panellists noted that structural weakness in the UKs financial system would be further exacerbated by the exit of Britain from Europe. In particular, the unconventional monetary policy of the Bank of England coupled with a general decline in bank lending to SMEs and a withdrawal of the European Investment Bank as a stream of funding means that it is increasingly unlikely that direct credit flow or capital market funds would be directed towards infrastructure investment.